Rolls-Royce does not expect to have to ramp up its development
spending as part of a bid to win work on Boeing's planned 7E7
Dreamliner project.

The aero-engine manufacturer is competing with US rivals General
Electric and Pratt & Whitney for a contract worth billions of
pounds.

However, John Cheffins, chief operating officer at Rolls Royce,
yesterday told a conference in Singapore: 'We have been spending at
a level that has been fairly consistent and we wouldn't expect to
see that spike up because we have a 7E7 programme.

The wide-bodied Dreamliner, which is due to enter service in 2008,
has been designed to help cash-strapped airlines save money on fuel and
operating costs and help Boeing claw back sales from arch-rival Airbus.

Boeing has already indicated that it plans to offer customers a
choice of two engines, but has yet to identify its preferred suppliers.
A decision is expected at the end of March.

However, Mr Cheffins said he doubted the 7E7 would, like the A380,
require three engine makers. In a recent engine competition, Airbus
split the role of suppliers for its 555-seat A380 between Rolls, GE and
Pratt.

'The level of competition provided by two engine manufacturers
is probably sufficient,' he said.

Charles Cuddington, RollsRoyce's managing director for
airlines, has already confirmed that its 7E7-engine design will be based
on the recently developed Trent 900, delivered to Airbus to power its
555-seat A380 doubledeck superjumbo.

Whichever firm wins the 7E7 contract will land work worth billions
of pounds over the next 20 years or so. Even more business could come
through sales of spare parts and maintenance, often worth several times
the cost of the engines themselves.

The Boeing competition has already raised the wrath of US aero
engine makers, who are concerned that what they described as UK
'subsidies' to Rolls-Royce would hurt their chances of snaring
a role in the 7E7.

At issue are hundreds of millions of pounds worth of Government
loans to help RollsRoyce build its jet engine family. The group has
declined to comment on US concerns.

Shares closed up 1 1 /4p at 214 1 /2.

COPYRIGHT 2004 Birmingham Post & Mail Ltd
No portion of this article can be reproduced without the express written permission from the copyright holder.